210 sats \ 2 replies \ @mallardshead OP 29 Sep 2023 \ parent \ on: Bitcoin satisfying Karl Marx's Das Kapital model of capitalism? bitcoin
I guess I meant scientific in the same way as political science, which I believe is a term coined by Aristotle ← I'm not using an argument of authority here, because there are good arguments to the contrary.
I'm curious to know why you call it defunct economic theory?
The classical economists (Smith, Ricardo, Malthus, Mill, Marx) believed that value was generated from the amount of labor required to produce a good. This theory had many major problems that were well known at the time.
At the time of Marx's writing, several economists (Jevons, Walras, Menger) independently came up with the central insight of modern economics: value is subjective. There is no way to calculate how valuable a good will be based on it's input costs. The only way to measure it is to let prices adjust and find out what people are willing to pay for it. Even then, all we've learned is that the goods sold at the prevailing price were worth more than their price to whomever purchased them and less to those who sold them (also, technically, that additional units are worth less to potential buyers than to potential sellers).
Subjective Value Theory is what let us come up with ideas like diminishing marginal returns and increasing marginal costs. In an objective value framework those core ideas don't make any sense and we can't explain almost any economic activity.
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Subjective value is interesting especially in the digital economy as we move along, specifically digital products, services, and ai. Surplus value I think still holds, and many of his big observations on the results of capital accumulation directionally have played out perfectly since industrialization with little resets along the way by way of anti-trust, and boom-bust cycles. Feels like we're entering a very different paradigm tho. Decentralization of money, renewable energy, digitization, and Ai were never accounted for in any economic models. A lot of economists try to shoehorn one or two into the system we have now. I feel all of these things are too base layer (fundamental) and composable for the status quo.
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